Ann Corcoran (Isaacs, Australian Labor Party, Shadow Parliamentary Secretary for Immigration) Share this | Hansard source

I rise to speak on the Tax Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2006. Way back in 1984, when Medicare was introduced, a levy was struck to help to meet the costs of this new and very welcome universal health care scheme. I remember the introduction of its predecessor, Medibank, and the changes that that system brought us. Medicare did the same when it was introduced in 1984, after the Fraser government dismembered and then effectively abolished Medibank. In his second reading speech on the introduction of Medibank back in 1973, the Hon. Bill Hayden said that the purpose of Medibank was to provide the ‘most equitable and efficient means of providing health insurance coverage for all Australians’.

The objectives of the original Medibank were a universal health care system, the equitable distribution of costs and an administratively simple system to manage. The original intention was that Medibank would be funded by a levy of 1.35 per cent of taxable income. However, this levy was removed by the hostile Senate and Medibank was funded out of general revenue. On its introduction, doctors were given the option of continuing to bill their patients and doing the follow-up work in chasing slow payers or bulk-billing the Health Insurance Commission at the end of each month for the patients they had seen. If this option was taken up, the doctor was paid 85 per cent of the schedule fee for all the services they had provided for their patients in that month. Many doctors immediately saw the advantage of this in administrative savings and a return to a focus on medicine rather than bookkeeping and chasing slow payers.

Not long after the introduction of Medibank, the Whitlam government lost office and the Fraser administration arrived. Under Fraser, Medibank was firstly changed to include a levy of 2.5 per cent, with an option of not paying it by taking out private health insurance. In 1978 medical benefits were reduced to 75 per cent of the schedule fee and bulk-billing was restricted to holders of pensioner health benefits cards and those deemed by the doctor to be, in the minister’s words, ‘socially disadvantaged’. The health insurance levy and the compulsion to insure were abolished in 1978. In 1979 Medibank benefits were limited to the difference between $20 and the schedule fee. In 1981 access to free hospital and medical care was restricted to pensioners with a health care card, sickness beneficiaries and those meeting stringent means tests. An income tax rebate of 32 per cent was introduced for those with private health insurance. Essentially, at this point Medibank had died.

In 1984 the Hawke government tossed all this out and reintroduced Medibank under the new name of Medicare. One difference was that this time the government was able to introduce a levy—one per cent in this case—to help fund the system. There was a low-income threshold of $7,110 for a single person and $11,803 for a family, below which the levy was not payable. For the record it should be noted that in 1995 the one per cent levy was increased to 1.5 per cent and in 1997 a surcharge of another one per cent was introduced for high-income earners who did not have private health insurance.

Medicare was to be a health care system that ensured that everyone could get good, affordable health care. For a long time Medicare was an excellent system. At its height in the middle 1990s we saw something like 80 per cent of doctors bulk-billing. Unfortunately, over the last 10 years it has been allowed to deteriorate and it is no longer the shining star of health services that it once was. This decline is a direct result of the present government’s deliberate actions or lack thereof, and this is a shameful decision by this government. The Australian government’s Medicare website describes Medicare as follows:

Medicare ensures that all Australians have access to free or low-cost medical, optometrical and hospital care while being free to choose private health services and in special circumstances allied health services.

I am here to tell the government that this is no longer the case. I have said it before and I have to say it again, because the situation has still not improved. A number of factors are slowly but surely creating a divide in Australia between those who have access to good health services and those who need access but are not seeking or getting those services because they do not have the money to pay for them. The contributing factors to the reducing effectiveness of our health care system in providing affordable care for everyone include the absolute refusal of this government to reinstate the Commonwealth Dental Scheme; the crazy, back-to-front and inequitable Medicare safety net scheme; the changes to the Pharmaceutical Benefits Scheme; the reluctance or at least slowness of the government to get new drugs onto the PBS; the threatened sale of Medibank Private; the government’s refusal to enter into serious negotiations with the state governments to end the buck-passing and the waste of money that occurs because of the dual nature of our health delivery system; and the simply mind-boggling stupidity of this government’s cuts to university funding and the deleterious effect this is having on the numbers of doctors, nurses and other medical professionals we are training.

The latest interesting move was last week’s news that the government is negotiating with the banks to see whether they will process Medicare refunds. Let us just deal with that thought first—the news that the four major banks are negotiating with the Minister for Human Services about processing Medicare transactions as part of the government’s smartcard project. I understand these negotiations involve fees for the banks to process our refunds. The obvious question that follows from all this is: who will ultimately pay these bank fees? If the intention is that these fees will be able to be passed onto Medicare clients then this is clearly not acceptable. Other options that spring to mind are that the government intends meeting these costs out of the health budget or out of the smartcard budget, which has already blown out. Or does the government mean to close down Medicare offices altogether? We need answers to these questions.

The Medicare safety net cannot be talked about without us remembering the rock solid, ironclad guarantee that the Minister for Health and Ageing gave the electorate in the last election campaign period. That guarantee was that the threshold for the safety net would not be increased. Of course, it is history now and the threshold has been increased—right back up to where the government wanted it in the first place, before it had to lower it to get it through the Senate that existed before the last election. The original safety net was introduced in the lead-up to the last election to quieten a fractious electorate, who were becoming more and more vocal about the deterioration of Medicare. This concern was chiefly about the increasing difficulty in many areas, including outer suburban areas, of finding a bulk-billing doctor.

At the same time that bulk-billing was declining, the gap that patients were asked to pay when they visited their non-bulk-billing doctor was growing. This was made even worse because many doctors were asking patients to pay their fees up front. This was putting enormous stress on many people, and we have heard awful stories of people not going to the doctor when they needed to because they did not have in their pockets the $40 or $50 they needed to get in the front door. I want to make it clear that I am not blaming the doctors for all of this. They are in business, they are entitled to make a living and they are dealing in their own way with the deterioration of Medicare.

The government recognised that they had to be seen to be doing something. It would have been better if they had done something useful. The government introduced a safety net arrangement. The government hoped that, if the patient or family could see that the doctor’s bills would not grow beyond a certain level, they would be reassured and stop agitating for issues facing Medicare to be addressed. The safety net does not address the problem of giving access to affordable health care and it was never going to. That point was made at the time by the opposition and by many in the health sector. The argument was and is that the safety net simply writes a blank cheque on health costs, whilst not assisting many of those finding it hard to afford decent health care.

The financial constraints around Medicare are a regulation on how much the doctor is paid—that is, the rebate amount. Whilst there is criticism of the current level of the rebate, that does not take away the function of the rebate as a regulating device. The safety net is no such regulation. It is unregulated and uncapped—in other words, it is a blank cheque. The scheme pays 80 per cent of an unregulated fee for an indefinite time. The scheme was always going to be hard to control, and this is exactly what has happened. The scheme does not assist those who really need assistance. Once a person or household reaches the threshold, the scheme will help, but until that point it is of no help at all. The patient still has to look into their purse to see if they have enough money up front to get in to see their doctor. If the cash is not there right now, no promises of future relief will help. The person on a tight budget is still left looking in their purse first and ringing the doctor second.

It is worth noting some interesting statistics which show very clearly that this scheme is not helping those in real financial need. A recent report showed that 15,520 people in the electorate of Isaacs have spent enough at the doctors to qualify for the safety net. This compares with 27,906 people next door in the electorate of Goldstein, which covers suburbs such as Brighton and Sandringham. The Treasurer’s seat of Higgins has 23,985 people who qualify. The average income in Isaacs is $35,713, whilst those in Goldstein earn on average $51,631 and those in Higgins $55,498. The total received from the safety net in Isaacs is $1.6 million, Goldstein has received $4.3 million and Higgins has received $4.5 million. Just to complete this miserable picture of how the safety net is not helping the people who need it most, those in Isaacs who have qualified received on average $368 per person, those in Goldstein received $524 per person and those in Higgins $652 per person. Clearly, the safety net dollars are not going to those who need them most.

The proposal the government is running at the moment to sell Medibank is causing concern in my electorate. People do not want to see this major provider of health insurance move into private ownership. I join with my colleagues who, after seeing the backflip on the sale of the Snowy Hydro scheme, are calling for a similar backflip on the proposed sale of Telstra and I am saying let us add Medibank to that list. The issue to keepto the fore in thinking about the proposed sale is: what about the users of our health system? The sale of Medibank will not improve access to decent and affordable health care. In fact, it will do the reverse. The sale will reduce the number of players in the field of health insurance. This will reduce competition and lead to an increase in the price of health insurance. Private health insurance premiums have increased dramatically over the last few years. They have gone up 40 per cent in the last five years. We do not need any more pressure on these prices. Australians want Medibank Private retained in public ownership. As revealed in a recent survey, 64 per cent of people did not think Medibank Private should be sold and 74 per cent of people thought it would lead to increased premiums. I have to agree with them.

Access to affordable and good health care includes access to affordable medicines, but this seems to have escaped the notice of this government. The Treasurer has noted in the recent budget that there are savings of $260 million more than the government expected on the PBS. The government was expecting savings following the changes to the PBS safety net and changes to the patient contributions, but not as much as has actually happened. I worry that these savings are nothing to do with people suddenly not needing medicines but more to do with the fact that people cannot afford to buy the medicines in the first place.

At the same time, much needed drugs are not getting onto the PBS. Lantus, a drug for diabetics, is one that a number of my constituents are asking about. This drug releases insulin slowly and suits many people better than the alternatives. One constituent describes it as giving him much better blood glucose readings in the morning and better control of his glucose levels during the day. Although this drug has been approved by the PBAC for listing on the PBS, the minister has still to take it to cabinet for a final sign-off. Meanwhile, my constituents are paying over $100 per month for Lantus—that is, the ones who can afford it.

An issue related to Medicare is the workforce issue being faced by general practitioners. My local GPs tell me that many doctors are no longer prepared to work the long hours that doctors used to work and that many are not interested in working full time. Some simply work part time, whilst others will work as a GP for a few days per week and then work elsewhere, still using their medical skills but not in the local GP practices. This means that some local GPs are facing very long hours each week as well as limited periods for holidays or time off. This adds to the other burdens of the relative falling value of Medicare rebates and the increasing costs which most practices are facing. The answer to these problems is not simple. Nevertheless, the problem must be addressed in a concerted effort by federal and state governments.

So, whilst I am not for a minute disputing the purpose of the bill before us, I do note that much needs to be done to get our health system back up to where it should be. We must address the problem of access to affordable health care—be that access to the local GP, access to affordable medicines or to other health services. We have to stop thinking of health costs as costs. We must see good health as the right of everyone—not just of those who can afford it. It is important for us all to take care of our collective health and to take preventative steps to avoid ill health. For those of us focused on the financial line, this makes good financial sense too. Ill health is expensive and if we can avoid it we should do so. We must quickly act to ensure that everyonehas access to affordable health care. This is not the case right now and it is to our shame that we allow this to happen when it can be addressed.

See this speech in context